Huobi Token Approved in Japan As Regulators Improve Protections
Huobi Token has become the first international exchange token approved by Japanese regulators, after the Financial Services Agency (FSA) approved HT as a compliant crypto asset able to trade in the world’s second largest digital asset market from May.
Only 25 other tokens have been approved on the FSA’s whitelist at this point as Japan tightens up regulations to better define crypto assets.
Last year, the Japanese House of Representatives revised the Payment Services Act (PSA) and Financial Instruments and Exchange Act (FIEA) with enforcement going into effect from May 1.
Law firm Morrison & Foerster LLP reports that some of the amendments will strengthen the protections for investors in crypto assets. A recent blog from the company explained that even custody providers who are not involved in the business of selling, purchasing, and intermediating the sale of crypto assets will be subject to the new PSA regulations.
Additional regulations for crypto exchanges
Crypto asset derivatives will also be audited under the FIEA regulation, and related businesses need to register to function within the Japanese crypto industry. Crypto-asset derivatives transactions that are settled by the delivery of crypto assets — previously regulated under the PSA — will also be part of the FIEA mandate.
Providers that have customers’ crypto assets in custody need to register as a crypto exchange provider after May 1.
New requirements under the PSA
Among the requirements related to customer assets proposed in the amendment to the PSA, the protections around user fiat custody stand out as these deposits must be held in a trust account. Exchanges are required to keep digital assets in cold wallets or their equivalent.
The regulations also stipulate that a portion of such assets held in a hot wallet must be 5% or less of the aggregate value of the customer’s assets held in custody.
Cointelegraph reported on April 1 that a report from Tokyo-based law firm So & Sato stated that strict regulations in Japan are likely to benefit new players in the long-term.
Published at Fri, 24 Apr 2020 02:25:00 +0000 Huobi Token Approved in Japan As Regulators Improve Protections